Contemporary treatment of critical bone defect remains a significant challenge in the field of orthopedic surgery. Engineered biomaterials combined with growth factors have emerged as a new treatment alternative in bone repair and regeneration. Our approach is to encapsulate bone morphogenetic protein-2 (BMP-2) into a polymeric matrix in different ways and characterize their individual performance in a nude mouse model. The main objective of this study is to examine whether the PLGA/HAp composite fibrous scaffolds loaded with BMP-2 through electrospinning can improve bone regeneration. The hypothesis is that different loading methods of BMP-2 and different HAp contents in scaffolds can alternate the release profiles of BMP-2 in vivo, therefore modify the performance of scaffolds in bone regeneration. Firstly, mechanical strength of scaffolds and HAp nanoparticles distribution in scaffolds were investigated. Secondly, nude mice experiments extended to 6 weeks were carried out to test the in vivo performance of these scaffolds, in which measurements, like serum BMP-2 concentration, ALP activity, X-ray qualification, and H&E/IHC tissue staining were utilized to monitor the growth of new bone and the changes of the corresponding biochemical parameters. The results showed that the PLGA/HAp composite scaffolds developed in this study exhibited good morphology/mechanical strength and HAp nanoparticles were homogeneously dispersed inside PLGA matrix. Results from the animal experiments indicate that the bioactivity of BMP-2 released from the fibrous PLGA/HAp composite scaffolds is well maintained, which further improves the formation of new bone and the healing of segmental defects in vivo. It is concluded that BMP-2 loaded PLGA/HAp composite scaffolds are promising for bone healing. Biotechnol. Bioeng. 2008; 99; 996–1006. © 2007 Wiley Periodicals, Inc.